What is an offer for sale (OFS)? SEBI rules (2026)
An offer for sale, or OFS, is a mechanism that lets promoters and large shareholders of a listed company sell their shares directly through the stock exchange. SEBI introduced it in 2012 to give sellers a transparent, exchange-based route to reduce their holdings, often to meet minimum public shareholding rules. Because an OFS sells shares that already exist, the company itself does not raise any new money. The proceeds go to the selling shareholder.
Definition
An offer for sale (OFS)
is a SEBI mechanism, introduced in 2012, that lets promoters and large shareholders of a listed company sell existing shares through the stock exchange. It transfers ownership rather than raising new capital, and SEBI reserves portions of the offer for retail investors and for mutual funds and insurers. Source: SEBI.
Who can run an offer for sale?
An OFS can be initiated by promoters or large shareholders holding at least 10 percent of a listed company, and it is available to companies above a defined market-capitalisation threshold. It is commonly used when a promoter needs to bring holdings down to comply with the minimum public shareholding requirement. The seller announces the OFS, a floor price, and the date, and bids are collected through the exchange.
How the shares are reserved
SEBI sets reservation rules so an OFS is not captured by a handful of large bidders:
- At least 10 percent of the shares are reserved for retail investors.
- At least 25 percent are reserved for mutual funds and insurance companies.
- No single bidder other than mutual funds and insurers can be allocated more than 25 percent of the shares offered.
10 percent
Minimum share reservation for retail investors in an OFS
Source: SEBI OFS framework
Why an OFS matters when you read ownership data
An OFS changes who owns a company. When a promoter sells down through an OFS, the promoter holding falls and public or institutional holding rises, and that shift shows up in the next quarterly shareholding pattern. Reading the OFS disclosure alongside the shareholding pattern tells you how a holding actually moved, and when.
An OFS is one of several institutional and promoter routes to move shares, alongside a qualified institutional placement and the anchor investor allocation in an IPO. Large on-exchange sales can also appear as bulk and block deals.
Flock reads primary filings and disclosures, dates each one, and links back to the source. What the data means for you is your call to make.
Frequently asked questions
What is an offer for sale (OFS)?
An offer for sale is a SEBI mechanism, introduced in 2012, that lets promoters and large shareholders of a listed company sell shares directly through the stock exchange. It is used to reduce holdings and meet minimum public shareholding norms. Source: SEBI.
Who can start an offer for sale?
Promoters and large shareholders holding at least 10 percent of a listed company can initiate an OFS. The mechanism is available to companies above a defined market-capitalisation threshold. It sells existing shares, so it does not raise fresh capital for the company. Source: SEBI.
Are shares reserved for retail investors in an OFS?
Yes. SEBI requires at least 10 percent of the shares offered to be reserved for retail investors, and at least 25 percent to be reserved for mutual funds and insurance companies. This spreads participation beyond a few large bidders. Source: SEBI OFS framework.
How is an OFS different from a QIP?
An OFS sells existing shares held by promoters or large shareholders, so the company raises no new money. A QIP issues new shares to institutions and raises fresh capital for the company. One transfers ownership, the other funds the business. Source: SEBI ICDR.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.